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General
Overseeing investment management for the Arkansas Community Foundation’s component funds is one of the most important responsibilities of the Board of Directors. The Board’s Finance Committee recommends all modifications to the Investment Policy, sets performance benchmarks, and monitors the practice and performance of the investment managers.
Balanced Pool
ARCF seeks to provide predictable, increasing amounts of revenue for grantmaking, while maintaining the purchasing power of assets. In order to achieve these objectives, the Foundation has adopted disciplined and integrated spending and investment policies. ARCF’s spending policy provides annual distributions of 5% of a twelve-quarter moving average of the endowment’s market value. In order to support this spending policy, ARCF has established a long-term strategic asset allocation of 30% fixed income, 65% equities, and 5% cash.
Independent Investment Managers
In order to provide flexibility, the ARCF Investment Policy allows the use of “Independent Investment Managers” for endowments of $1 million or more. The independent investment manager must follow the ARCF Investment Policy but has the ability to actively manage the assets.
The American Funds Option
The Community Foundation has also formed a partnership with the American Funds Group. The American Funds Community Foundation Program offers options to donors and allows financial professionals (licensed to sell mutual funds) to maintain an on-going interest in the investment of assets donated by clients.
When a client chooses to establish a charitable fund with the Foundation and invest the donated assets in American Funds, American Funds will pay the broker of record an upfront fee and trailing (12(b)-1) fees for as long as the Foundation continues to invest those assets with American Funds.
How it Works:
- Any financial professional (licensed Series 7 or 6) who uses American Funds refers a client to the Arkansas Community Foundation.
- The Foundation’s staff will partner with the financial professional and his or her client to explore their charitable interests and identify a giving arrangement that fits with their overall estate and financial planning needs.
- The client makes a gift to the Foundation.
- ARCF, working with the financial professional, completes an account application with American Funds.
- The assets are invested in an American Funds mutual fund and the financial professional is named as broker of record.
Benefits to the Financial Advisor:
- Advisor adds charitable planning to his/her repertoire of services.
- Up-front “broker” fee (paid by American Funds)
- 1% on the first $4 million held by the Foundation;
- 50 basis points on the next $6 million held by the Foundation;
- 25 basis points thereafter.
- Trailing fees (12(b)-1 fees)
- 25 basis points each year for American Funds shares held by the Foundation over one year
- The financial professional helps client convert non-performing assets to fee-generating charitable use.
- Multi-generational planning opportunities.
Benefits to Your Clients:
- Tax benefits of charitable planning.
- Expert counsel in charitable giving.
- Access to all of the Foundation charitable products and services.
- The joy of “giving something back” to the community.
Contact Us
If you would like to learn more, please contact:
Heather Larkin Eason, President and CEO
501.372.1116 or toll free 888.220.2723
heason@arcf.org | 
